Flint Electric Membership Corp. v. Whitworth

United States Court of Appeals,
Eleventh Circuit.
Nos. 94-9199, 94-9227.
FLINT ELECTRIC MEMBERSHIP CORPORATION, Plaintiff-Appellee,
v.
Bobby WHITWORTH, Individually and in his official capacity as
Department of Corrections Commissioner, Clyde Stovall, Individually
and in his official capacity as Assistant Commissioner of
Department of Corrections, Defendants-Appellants,
Georgia Power Company, Defendant.
PATAULA ELECTRIC MEMBERSHIP CORPORATION, Plaintiff-Appellee,
v.
Bobby WHITWORTH, Individually and in his official capacity as
Department of Corrections Commissioner, Clyde Stovall, Individually
and in his official capacity as Assistant Commissioner of
Department of Corrections, David C. Evans, Individually,
Defendants-Appellants,
Georgia Power Company, Defendant.
Nov. 15, 1995.
Appeals from the United States District Court for the Northern
District of Georgia. (Nos. 1:90-CV-1550-HTW and 1:90-CV-1675-HTW),
Horace T. Ward, Judge.
Before BARKETT, Circuit Judge, and HENDERSON and CLARK, Senior
Circuit Judges.
PER CURIAM:
Bobby Whitworth, Clyde Stovall and David C. Evans, officials
of the Georgia Department of Corrections (the "DOC"),1 appeal from
orders entered in the United States District Court for the Northern
1
Whitworth is identified in the record as either the
Commissioner or the Deputy Commissioner of the DOC during the
relevant time frame and Evans as his predecessor in the office of
Commissioner. Stovall is described as the Assistant Commissioner
or the Director of Facilities Development and Maintenance for the
DOC. They shall be referred to collectively as the "DOC
officials" or "defendants."
District of Georgia denying their motions for summary judgment
asserting qualified immunity from 42 U.S.C. § 1983 damages. For
the reasons stated below, we reverse the denial of qualified
immunity and remand the case to the district court for further
proceedings consistent with this opinion.
I. BACKGROUND
These appeals arose out of separate lawsuits brought by Flint
Electric Membership Corporation and Pataula Electric Membership
Corporation (the "EMCs"), against the DOC officials2 and Georgia
Power Company ("Georgia Power"). The substantially identical
amended complaints alleged that, under Georgia's State Purchasing
Act and as "lowest responsible bidders," the EMCs were entitled to
receive licenses to supply certain electrical services to the DOC,
which were awarded instead to Georgia Power in contravention of the
state statute. Counts One and Two contended that by entering into
the contracts with Georgia Power, the DOC defendants violated the
EMCs' substantive and procedural due process rights, giving rise to
§ 1983 claims for injunctive relief and damages. Count Three
asserted a state law cause of action based upon the same
allegations. The district court initially dismissed the actions on
the pleadings for failure to state a claim under § 1983, finding
that the EMCs had no federally protected property interest in the
contracts. In an earlier appeal from that decision a panel of this
court reversed, holding that Georgia law requires electrical
service contracts with the state to be awarded to the lowest
2
Whitworth and Stovall were named as defendants in both
actions. Evans was sued solely by Pataula Electric Membership
Corporation.
responsible bidder "whenever possible." Pataula Elec. Membership
Corp. v. Whitworth, 951 F.2d 1238, 1241-42 (11th Cir.), cert.
denied, --- U.S. ----, 113 S.Ct. 302, 121 L.Ed.2d 225 (1992). The
court explained that competitive bidding for electrical service is
not possible in most cases because the Georgia Territorial Electric
Service Act allows only one electricity supplier to provide service
in a particular locality. Id. at 1241 n. 3. Here, however, more
than one provider was eligible to furnish this service. The court
consequently held that "there [was] no impediment to competitive
bidding, [and] the State Purchasing Act and relevant rules
mandate[d] competitive bidding." Id. at 1242. The court found
further that, "[a]t a minimum, then, plaintiffs state[d] a
cognizable [due process] claim by alleging that defendants abused
their discretion by arbitrarily ignoring competitive bidding
requirements." Id. at 1243. The court concluded that the DOC
officials should have known they were required to follow
competitive bidding procedures under clearly established state law,
thus, they were not entitled to qualified immunity from § 1983
monetary liability. Id. at 1244.
On remand, the parties proceeded with discovery. Thereafter,
Georgia Power and the DOC defendants filed motions for summary
judgment. The motions addressed the merits of the actions and, in
addition, the DOC officials again asserted a qualified immunity
defense. The district court denied all the motions. The DOC
officials then filed the current appeals, which have been
consolidated for our review.
II. DISCUSSION
Although final orders have not been entered in these cases,
we have jurisdiction to review the district court's denial of the
motions for summary judgment grounded on qualified immunity.
Mitchell v. Forsyth, 472 U.S. 511, 530, 105 S.Ct. 2806, 2817, 86
L.Ed.2d 411, 427 (1985). Our consideration of this issue is de
novo. Elder v. Holloway, 510 U.S. ----, ----, 114 S.Ct. 1019,
1023, 127 L.Ed.2d 344, 351 (1994). This court's prior decision
that the DOC defendants were not entitled to qualified immunity
from § 1983 damages is binding here as the law of the case unless
(1) new and substantially different evidence material to the issue
has been presented; (2) controlling authority has been rendered
which is contrary to the law of the previous decision; or (3) the
earlier ruling was clearly erroneous and would work a manifest
injustice if implemented. United States v. White, 846 F.2d 678,
685 (11th Cir.), cert. denied, 488 U.S. 984, 109 S.Ct. 537, 102
L.Ed.2d 568 (1988).
The main thrust of the current appeal is the defendants'
insistence that, contrary to this court's earlier observation that
there was no impediment to competitive bidding, later discovery
revealed that it was impossible to determine a "lowest responsible
bidder" because neither the EMCs nor Georgia Power could guarantee
a fixed rate for electrical service over the life of the contracts.
They also maintain that the EMCs failed to adhere to competitive
bidding procedures. They claim that now it is clear that the EMCs
did not in fact have a property right in the contracts because
competitive bidding was either impossible and/or did not take place
due to the EMCs' own failure to follow the competitive bidding
rules. They postulate that, in the absence of a property interest,
they are entitled to qualified immunity.
In keeping with the district court's decision, we must reject
these arguments. The record shows that the EMCs had sufficient
awareness of the competitive bidding procedures to form a valid
expectation of entitlement to the contracts if they submitted the
lowest bids. See Board of Regents v. Roth, 408 U.S. 564, 577, 92
S.Ct. 2701, 2709, 33 L.Ed.2d 548, 561 (1972). The record also
supports the district court's finding that the EMCs were the
"lowest responsible bidders." The appellants have offered no legal
authority for their suggestion that the prospect of a subsequent
rate increase rendered competitive bidding impossible.
Furthermore, there is undisputed evidence that the EMCs have
refrained from retail rate increases in the past despite rises in
wholesale costs. The consultant employed by the DOC to analyze and
evaluate the bids specifically found that Georgia Power had
historically promulgated greater rate increases than the EMCs and
that, over the long run, their rates would probably "approach each
other." For this reason, the consultant viewed the rate increase
issue as an insignificant factor in determining cost over the life
of the contracts. By contrast, in choosing the EMCs, the DOC stood
to realize definite and substantial savings in the shorter term,
both in the rates charged and the cost of leasing equipment.
Consequently, this court's earlier decision that the EMCs were
vested with a property right in the contracts remains the law of
the case.3
Even though the EMCs' rights to a property interest in the
contracts remain, we nevertheless hold that because of a change in
the law governing the viability of their due process claims, the
defendants are now entitled to qualified immunity from § 1983
damages. In McKinney v. Pate, 20 F.3d 1550 (11th Cir.1994) (en
banc), cert. denied, --- U.S. ----, 115 S.Ct. 898, 130 L.Ed.2d 783(1995), decided after the prior appeal in these cases, the court
held that § 1983 substantive due process claims arising from
nonlegislative deprivations of state-created property interests are
no longer cognizable in this circuit. Id. at 1560.4 It has also
become evident, in light of McKinney, that the EMCs' procedural due
process claims are not ripe for review. In McKinney the court
observed that, unlike the deprivation of a right provided by
substantive federal law, which gives rise to a § 1983 lawsuit as
soon as the wrongful action is taken,
a procedural due process violation is not complete "unless and
until the State fails to provide due process." In other
words, the state may cure a procedural deprivation by
providing a later procedural remedy; only when the state
refuses to provide a process sufficient to remedy the
procedural deprivation does a constitutional violation
actionable under section 1983 arise.
3
We stress that the underlying finding that the EMCs were
the lowest responsible bidders does not involve a factual
dispute. The appellants do not contest the accuracy of the
consultant's cost assessments. They urge simply that a future
rate hike by any of the bidders would introduce an unknown
element into the formula. Given the consultant's reasoned
rejection of this factor as an obstacle to determining long-term
costs, it was not impossible for the appellants to reach a
competitive bidding decision.
4
The alleged deprivations at issue here plainly stem from
non-legislative acts, see McKinney, 20 F.3d at 1557 n. 9, and
involve a state-created property right.
Id. at 1557 (quoting Zinermon v. Burch, 494 U.S. 113, 126, 110
S.Ct. 975, 983, 108 L.Ed.2d 100, 114 (1990)). Thus, even when a
plaintiff has "suffered a procedural deprivation at the hands of
[the state], he has not suffered a violation of his procedural due
process rights unless and until the State ... refuses to make
available a means to remedy the deprivation." Id. at 1563.
The Supreme Court of Georgia has held that "[w]hen, as here,
a governmental entity has frustrated the bid process and awarded
the contract to an unqualified bidder, the injured low bidder may
bring an action for appropriate relief." City of Atlanta v. J.A.
Jones Constr. Co., 260 Ga. 658, 659, 398 S.E.2d 369, 370 (1990),
cert. denied, 500 U.S. 928, 111 S.Ct. 2042, 114 L.Ed.2d 126 (1991).
One vehicle for bringing such an action in state court is O.C.G.A.
§ 50-5-79, through which contracts made in violation of the State
Purchasing Act may be declared void. 5 See also Amdahl Corp. v.
Georgia Dep't of Admin. Servs., 260 Ga. 690, 695-97, 398 S.E.2d
5Section 50-5-79 provides:
Whenever any department, institution, or agency of
the state government required by this part and the
rules and regulations adopted pursuant to this part
applying to the purchase of supplies, materials, or
equipment through the Department of Administrative
Services shall contract for the purchase of such
supplies, materials, or equipment contrary to this part
or the rules and regulations made pursuant to this
part, such contract shall be void and of no effect. If
any official of such department, institution, or agency
willfully purchases or causes to be purchased any
supplies, materials, or equipment contrary to this part
or the rules and regulations made pursuant to this
part, such official shall be personally liable for the
cost thereof; and, if such supplies, materials, or
equipment are so unlawfully purchased and paid for out
of the state funds, the amount thereof may be recovered
in the name of the state in an appropriate action
instituted therefor.
540, 544-46 (1990) (frustrated bidders who allege violations of
state procurement laws may seek equitable relief and damages
limited to the recovery of bid preparation costs under general
principles of law); Hilton Constr. Co., Inc. v. Rockdale County
Bd. of Educ., 245 Ga. 533, 540, 266 S.E.2d 157, 162-63 (1980) (low
bidder had right to damages and/or injunctive relief, to be
determined by the trial court on remand).
The EMCs could have filed actions in state court pursuant to
O.C.G.A. § 50-5-79 for the purpose of rescinding the contracts with
Georgia Power and/or to recover their bid preparation costs.6
Because they failed to do so, and because the rule of law announced
in McKinney must be applied retroactively, McKinney, 20 F.3d at
1566, their § 1983 procedural due process claims are not
actionable.7
6
By this statement, we do not intend to imply that this was
the sole course of action available to the EMCs under Georgia
law. We point out only that the state provided an adequate
process for redressing the EMCs' complaints.
7
Although the effect of McKinney on the EMCs' due process
claims was not resolved in the district court, we have the
authority to address this pure question of law on appeal. See
Skinner v. City of Miami, Fla., 62 F.3d 344, 347-48 (11th
Cir.1995) (following McKinney to hold that the complaint failed
to state a constitutional claim even though the issue was not
raised by the defendant in the district court or on appeal);
Narey v. Dean, 32 F.3d 1521, 1526-28 (11th Cir.1994) (recognizing
for the first time on appeal that the plaintiff's substantive and
procedural due process claims were eviscerated in light of
McKinney ); see also Plaut v. Spendthrift Farm, Inc., 514 U.S. -
---, ----, 115 S.Ct. 1447, 1450, 131 L.Ed.2d 328, 339 (1995) (a
new rule of federal law applied to the parties in the case
announcing the rule must be utilized in all cases pending on
direct review) (citing James B. Beam Distilling Co. v. Georgia,
501 U.S. 529, 111 S.Ct. 2439, 115 L.Ed.2d 481 (1991)). We note
that the McKinney decision was issued after the motions for
summary judgment and supporting briefs were filed, but before the
district court entered its orders. It would have behooved the
defendants to file supplemental briefs bringing McKinney to the
In Siegert v. Gilley, 500 U.S. 226, 111 S.Ct. 1789, 114
L.Ed.2d 277 (1991), the Supreme Court observed that a "necessary
concomitant" to the decision of whether a defendant is entitled to
qualified immunity, "is the determination of whether the plaintiff
has asserted a violation of a constitutional right at all." Id. at
232, 111 S.Ct. at 1793, 114 L.Ed.2d at 287. The complaints in the
present cases state neither substantive nor procedural due process
claims. Consequently, we must reverse the district court's denial
of qualified immunity from § 1983 damages.
Even though no federal rights remain to be determined in
these cases, the EMCs may be permitted to pursue the state law
cause of action raised in Count Three of their amended complaints
in the federal forum. The decision of whether to dismiss a
complaint still containing state law issues after all federal
causes evaporate is within the district court's sound discretion.
See 28 U.S.C. § 1367(c); McCoy v. Webster, 47 F.3d 404, 408 (11th
Cir.1995). These actions present the unusual circumstance that, at
the time the complaints were filed, it was common practice in this
district court's attention after that decision was published. In
its orders denying the motions for summary judgment, the district
court astutely invited them to do so. They chose instead to
immediately appeal the district court's rulings on the qualified
immunity issue. Perhaps they feared that the time for appeal
would expire during the pendency of supplemental pleadings.
However, the question of qualified immunity could have been
preserved for review, with the benefit of a full exploration of
the McKinney issues in the district court, and this appeal
possibly avoided, if the defendants had served timely
Fed.R.Civ.P. 59 motions to alter or amend the district court's
denials of summary judgment in view of McKinney. See
Fed.R.App.P. 4(a)(4)(C) (tolling the time for appeal during the
pendency of a timely Rule 59 motion). At the oral argument
before this court, the parties were directed to and did address
the effect of McKinney on the due process claims.
circuit to bring § 1983 lawsuits in federal court asserting
substantive and procedural due process claims arising from the
deprivation of state-created property rights, without resorting to
remedies made available by the state. In addition, we have held on
occasion that it may be an abuse of discretion to dismiss an
outstanding state law cause of action after the statute of
limitations has expired. See McCoy, 47 F.3d at 408 n. 4. The
district court should consider these factors in the exercise of its
discretion and in reaching its decision.
III. CONCLUSION
In accordance with the foregoing, we AFFIRM the district
court's finding that the EMCs were vested with a state-created
property right in the electrical service contracts as "lowest
responsible bidders." We REVERSE the district court's denial of
qualified immunity from § 1983 damages and REMAND the case to the
district court for further proceedings with respect to the state
law cause of action alleged in Count Three of the amended
complaints.8
8
In addition to the qualified immunity issue, the defendants
urge us to review those portions of district court's orders
denying summary judgment on the merits, which are relevant to the
§ 1983 claims lodged against them in their official capacities.
See Lassiter v. Alabama A & M Univ., 28 F.3d 1146, 1149 n. 2
(11th Cir.1994) (observing that the qualified immunity defense
extends solely to § 1983 complaints for damages against state
actors in their individual capacities). They maintain that we
may do so by exercising pendent appellate jurisdiction in a
manner consistent with Swint v. Chambers County Comm'n, 514 U.S.
----, ----, 115 S.Ct. 1203, 1212, 131 L.Ed.2d 60, 74-75 (1995)
(leaving open the possibility of exercising pendent appellate
jurisdiction in appropriate circumstances). Because of our
holding that the complaints fail to allege a § 1983 cause of
action of any sort, we find it unnecessary to address this
contention.